Former Detroit Water Dept Head Indicted; Fired From Texas Job

More fallout from all those Federal indictments of Detroit’s former mayor, his father, and three city workers.

Former water department head Victor Mercado has been fired.

He’d been working for the town of Bexar, near San Antonio, Texas. Mercado has been named in the Federal corruption indictment.

A 38-count federal indictment claims the one-time darling of Michigan’s Democratic Party and the city’s twice-elected but now-disgraced former mayor pocketed far more as head of a criminal enterprise headquartered from his office on the 11th floor of City Hall.

The indictment, handed up Wednesday by a grand jury, allege that Kwame Kilpatrick, his father, Bernard, and some of the imprisoned ex-mayor’s allies weaved an intricate path of corruption that prosecutors say finally shines a light on greed within city government that leveraged access and influence.

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Mr. Mercado was indicted for exchanging actions and decisions for payments. One of the payers was Sam Riddle, since convicted in the sludge hauling case. In addition to that case, Mr. Riddle is known to have been a go-between in “negotiations” between Genesee County’s Jeff Wright and Mr. Mercado.

No one has said publicly what Mr. Riddle was supposed to accomplish in those negotiation, though it’s been implied that he was to get Mr. Mercado and associates to lower the northern-customer rates. However, during Mr. Riddle’s period of consulting employment, Detroit’s northern-customer rates instead went up.

It’s been noted that Mr. Wright had long wanted to create a major water system (the Karegnondi project) independent of Detroit’s, with himself as its head. In order to form the political consensus necessary for the Karegnondi project to gain the taxing power to go forward, the Detroit water relationship with its northern customers had to be obviously unreasonable.

The Detroit water relationship become obviously unreasonable during the period of time when Mr. Riddle was employed by Mr. Wright for purposes of conducting undefined negotiations between Mr. Wright and the Detroit water department, i.e. Mr. Mercado and associates.

One theory is that someone provided funds to Mr. Riddle, who conveyed those funds to Mr. Mercado and associates in return for the Detroit water relationship with its northern customers becoming obviously unreasonable.

At some point during that relationship between Mr. Wright and Mr. Riddle, the FBI approached Mr. Wright and convinced him to cooperate. No one has said yet exactly what Mr. Wright cooperated on, or whether Mr. Riddle also cooperated.

Mr. Riddle logically couldn’t have been a sole actor in his dealings with Mr. Mercado and associates, because Mr. Mercado expected pay-for-play and Mr. Riddle had neither funds of his own for such purposes, nor any reason to spend them to influence Genesee County’s access to Detroit water. Neither Mr. Wright nor Mr. Riddle was included in the indictment.

Now that Mr. Mercado has been indicted, some people expect that a further indictment must be waiting for whoever provided the funds that Mr. Riddle used to influence Mr. Mercado. This theory assumes that the small payments to Mr. Riddle revealed by Mr. Wright’s books can’t have been the only money involved. It’s also unclear why Mr. Wright and Mr. Riddle were not included in the law enforcement actions. And, of course there is the question of what will be done about the unreasonable rate increases for Detroit’s northern water customers, and whether the tax funding for the high costs of the Karegnondi project ever made regional sense given that the Detroit system already exists.